Feeling empowered and in control of your financial journey is not just a distant dream—it’s within your grasp. Luckily, combating financial stress can be easy when you approach it a few different ways, and that builds momentum of motivation to keep going! By taking charge of your financial well-being, you’re investing in your future and unlocking a newfound sense of freedom and possibility.
Use our tips as a roadmap to overcome financial stress and reclaim your sense of empowerment. From practical budgeting tips to mindful spending strategies, we’ll explore actionable steps to help you navigate your finances with confidence and ease. Let’s dive in!
Understand Your Financial Situation
Being aware of your financial situation goes a long way to combatting stress, because when you’re in the know, you can feel more confident in your money moves!
Take some time to understand how much money you have coming in consistently. If you’re salaried or work a fixed number of hours each month, you’re set! If your income is inconsistent, such as working a shift job with varying hours, working freelance or project-based, or having bonuses or commission as part of your compensation, it’s important to work off of the lowest amount you typically earn. Some people may reduce their financial stress by finding a job with more financial consistency to make budgeting easier.
From there, tracking spending habits, getting a good grasp on your expenses, and adhering to a budget are powerful tools to keep your money related stress low. But it’s not just about paying bills! Setting aside room in your budget for discretionary spending on things that bring you joy helps you craft a lifestyle aligned with your values.
Build an Emergency Fund
An emergency fund is your shield against financial turbulence, offering reassurance that you’re equipped to weather any storm. Experts advise stashing away three to six months’ worth of income to address a drop or loss of income. Having your health insurance, homeowner’s insurance, and/or car insurance deductibles saved can provide a safety net for some types of emergencies.
With an emergency fund, it’s all about being able to handle unexpected events or costs, limiting money stress because that piece of it is covered.
Automate Your Finances
Automating your finances is like having a personal assistant freeing you from the time involved with daily money management. Here are a few ways to automate your money to reduce financial stress:
- By setting up autopay for as many bills as you reasonably can, you eliminate the mental clutter of worrying about due dates and late fees
- Set up a spending challenge in Milli which can do the work of tracking your spending for different budget categories, making it easier for you to stay on budget!
- Save for retirement by allocating a portion of your paycheck into an employer-sponsored account like a 401(k)
- Use direct deposit to channel another portion of your paycheck into a dedicated high-yield savings account, and let the annual percentage yield grow your money
With each automated transaction or tool you use, you’re streamlining your finances and in turn reducing your mental load.
Practice Mindful Spending
Embracing intentional, mindful spending can help you reduce stress by creating a lifestyle of contentment. When you spend intentionally, you’re making an active decision about how to allocate your money. That may mean you’re able to free up money to combat things that cause financial stress (like paying down debt or padding your savings) or for activities that enrich your life, and you’re more likely to be satisfied with your purchases.
Here are a few ways to put this in practice:
Get familiar with emotional spending and aspirational spending, then work to address those in your life. Check out those linked blog posts for more information.
Take stock of what you have! Take inventory of the categories of items around your home – especially those that you tend to spend money on. Whether it’s tools, clothes, video games, home decor, or something else, being aware of what you already have can make it easier to skip unnecessary purchases when you know you have a similar item.
Make it a habit to use what you have first. After you’ve taken inventory, brush off those things that you uncovered. Read that book or use up those skincare products you already have on hand. If you discover you truly have a need for something, then you can proceed to shop for it and feel good knowing your spending is intentional.
Do a no-spend challenge. To help reset spending habits, some find it helpful to go on a self-imposed spending hiatus. This might look like sticking to buying essentials for a short period of time (maybe a month) or eliminating spending in one category for a longer period of time.
Implement a waiting period before making non-essential purchases. This allows you to reflect and ensure the purchase aligns with your values and financial goals. This is a simple way to curb impulse while building empowerment and control over your financial destiny.
Need some help with mindful spending? Set up a spending challenge in Milli! Choose the category or categories you wish to track, set a spending limit, and Milli will help keep you on under budget by showing you how much left you have to spend in that month!
After you recalibrate your spending habits, you may feel a sense of relief and reduced stress. You may feel less pressure to spend money on things that don’t align with your values. This can empower you to stick to your budget and meet your financial goals, which can help specifically with financial stress.
Build Financial Literacy
Financial literacy isn’t just about money management; it’s about knowing the best options for your money and how to make it work for you. By understanding the world of finance, you gain the knowledge and confidence to make informed decisions about your finances. That empowers you to make choices that will help you reach your financial goals. Building financial literacy is a proactive way to mitigate financial stress in the long run, as it can help you build financial stability.
There are tons of ways to fill in your financial knowledge – for free! Read blogs (like this one), read financial books that deep dive on a particular topic, listen to finance podcasts, and get information from the Consumer Financial Protection Bureau’s financial education resources in both English and Spanish.
Over time, you’ll become aware of the basics of money management, the different types of accounts you can use (saving, retirement, brokerage, etc.), and ways to grow your wealth. That can help you allocate your money to meet your short and long-term needs, which is an impactful way to minimize financial stress.
Think about the area of finance where you feel like you know the least, and make that your starting point to learn more. When you get informed, you become empowered!
Manage Other Types of Stress
Financial stress is just one type of stress that we encounter in our lives. Fortunately, by working to manage other types of stress, that can make it more feasible to tackle any sources of financial stress.
The Mayo Clinic lists things like getting enough sleep, physical activity, yoga, healthy eating, connecting with others, journaling, and seeking counseling as ways to address stress in general. It may feel frivolous when you have serious matters going on in your daily life, but a scientific peer-reviewed study found that green exercise – activity while in nature – leads to positive short and long-term health outcomes like improved mood and self-esteem. While working on your downward dog pose won’t immediately solve the issue of paying your bills, incorporating these stress-busting activities can bring about a general sense of wellness.
Over time as you work to manage other types of stress, you may find that gives you the energy and mental clarity to take on the specific things that would improve your financial situation; maybe it’s looking for a better-paying job or making a plan to squash debt or build an emergency fund. Start small by adding in new healthy habits gradually, and you’ll be amazed at the transformation months or years in the future!
Conclusion
You’ve heard the saying “it’s about the journey, not the destination” – and it applies to financial wellness! By focusing on holistic growth and making strides in multiple areas of your financial situation, you’re laying the foundation for lasting success. Prioritize the right direction over speed. Each step forward, big or small, is a victory worth celebrating. As you continue on your path to financial empowerment, embrace the journey, stay committed to your goals, and trust in your ability to create the positive change that will combat financial stress in your life.
If you’re looking for a bank that’s in your corner when it comes to financial wellness, you need Milli. Our goal is to help you have more money for the things that matter most. With our helpful spending insights, automated savings tools, and competitive Annual Percentage Yield, we’re committed to helping you on your financial journey. Download Milli from the App Store or Google Play and sign up today!
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